On Monday, the Royal Swedish Academy of Sciences awarded the 2017 Nobel Prize in Economics to American economist Richard Thaler, 72, "for his contributions to behavioral economics."
Thaler, a professor of behavioral science and economics at the University of Chicago's Booth School of Business, helped bridge "economic and psychological analyses of individual decision-making," and his "empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioral economics, which has had a profound impact on many areas of economic research and policy," the Swedish Academy said.
Thaler's pioneering work in behavioral finance included research into the consequences of limited rationality, social preferences in regards to the market effects of consumers' fairness concerns, and how lack of self control can lead to long-term financial and health problems. "In his applied work, Thaler demonstrated how nudging — a term he coined — may help people exercise better self-control when saving for a pension, as well in other contexts," the Swedish Academy said. Thaler responded to his Nobel, and its $1.1 million award, by promising to "try to spend it as irrationally as possible!" And for a discipline known as the "dismal science," that's not a bad quip.